Oil Context Weekly (W48)
Crude prices pulled back from upper end of recent range on Israel-Hezbollah ceasefire after which they traded sideways as the market awaits any indication of OPEC+’s plans for 2025.
I joined BNN Bloomberg for a discussion about both Trump’s threatened oil tariffs and how I was interpreting the announcement that OPEC+ was delaying its long-planned meetings until later next week. I also spoke with both the Financial Times and Reuters about the likely economic impacts stemming from potential US oil tariffs.
All the tariff-related media and client focus this week prompted me to write down some longer-form thoughts, which I published earlier today in Tough Tariff Talk.
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Summary
Flat Prices took a $2/bbl step back following news of a ceasefire agreement between Israel and Hezbollah, but the move only served to reinforce a months-long range for crude and was much more likely a convenient trigger than a true reassessment of oil-relevant risk perception.
Timespreads were reasonably stable, with Brent prompt spreads flattish and DFLs strengthening modestly; WTI spreads pulled back from an idiosyncratic rally at the end of last week.
Inventories data leaned bullish between a 1.8 MMbbl draw in the US, a whopping 5.7 MMbbl draw in ARA Europe, and a modest 0.5 MMbbl build in Singapore.
Refined Products weakened modestly over the course of the week, with both gasoline and diesel crack spreads falling, while heavy fuel oil cracks remain abnormally strong.
Investor Positioning confirmed that speculators were very modest net sellers of Brent crude futures and options contracts over the past week, while CFTC data for WTI contracts is delayed to Monday due to the Thanksgiving holiday.
As Well As OPEC+ kicks the can on meeting to kick the can and may be weighing a longer full-quarter delay to its planned output hike, Israel and Hezbollah agree to a temporary ceasefire, and president-elect Trump threatens 25% tariffs against Canadian and Mexican goods—oil included.